Richard Russell – Here Is What I’ve Learned After 90 Years
Today the Godfather of newsletter writers, 90-year old Richard Russell, shares what he has learned after 90 years on this earth. The 60-year market veteran also covered gold, silver, deflation, Europe, Germany, the Fed, QE, the U.S. dollar and much more.
Russell: “The world situation is as complicated as I’ve ever seen it. So let’s try to make it simple. The world is in a state of deleveraging and deflation. Europe is close to recession. Germany, the engine of the European economy, is stalling. China, now arguably the world’s largest economy, is running out of gas. Brazil is slumping, as is Japan. The only economy in the world that appears to have a strong heartbeat is the US. The great fear today is that the world may sink into a downward spiral of deflation. The Central Bank of Europe would like to join the Fed in Quantitative Easing. But Germany, which is terrified of inflation, will not stand for QE.
Thus it falls on the Federal Reserve to save the world from the terror of deflation. Will the Fed shut down QE as it claims? Or will it reverse its schedule of ending QE by the end of this month? The Fed has already bought nearly $4 trillion of bonds in its QE operations, and it hesitates to buy more.
The Fed meets tomorrow and Wednesday, after which we will discover what it intends to do. As matters stand now, the stock market is almost motionless as it awaits the Fed’s decision. Gold bullion has backed off slightly, but the gold mining stocks have been hit hard. The gold miners are cheap, hated and showing signs of stabilizing. Many speculators feel that the gold mining stocks are selling like perpetual warrants and can be bought as long-term holdings. I think the stock market’s constructive action will encourage the Fed to shut down QE as promised. But it is only after QE is actually shut down that we will know the rest of the story.
